The influence of minimum wage on Brazilian wage rate in the last decade

ABSTRACT

In this paper, we review the institutionalist and structuralist labor market theory by analyzing the connections between the increase in formal employment and in minimum wage that occurred in the Brazilian economy in the last decade. The evolution of the minimum wage exerted an important influence on the predominant compensation received by unskilled labor in the formal and informal labor market. We argue that besides the positive impact of a minimum wage on the labor market, this influence took place as a result of changes in consumption patterns, employment structure and in relative prices.

Keywords:
Minimum wage; Employment; Economic growth; Poverty; Income distribution